Public transport operator FirstGroup said today that its first-half results would be in line with management expectations as it was boosted by an extension to its Great Western rail franchise.

First, whose UK bus division includes many rural services in East Anglia, revealed in a pre-close trading update that the franchise serving routes out of London’s Paddington station to the west of England and south Wales had been extended by 23 months to September 2015.

The group said its rail division had delivered another “solid” performance in the six months to September 30, with like-for-like revenue expected to be 5.7% ahead.

And it added that its UK bus division, which is in the middle of restructuring programme to restore profitability. was on track for a 1.6% like-for-like increase.

“While the pace and approach being taken to fares and network changes is deliberately tailored to local market conditions, it is pleasing that overall the division is expected to report passenger volume growth, of 0.6%, for the first six month period in several years,” the group said.

“Where changes to our commercial proposition have been in place longest or have changed most significantly ... we are seeing particularly pleasing increases in commercial passenger volumes.

“A number of our local markets continue to face challenging economic conditions, and there remains considerable work to be done to meet our medium-term objective of double digit margins for the division, but as we progress through our transformation plans, our confidence continues to increase.”

Following a review of its bus services in Suffolk, FirstGroup is set to axe three routes from next month ? 56 (Ipswich town centre to Broke Hall, via Foxhall Road), 70 (Ipswich railway sation and town centre to Warren Heath, via Gainsborough and Ravenswood) and 87 (the Stowmarket circular).

First says the withdrawals reflect low passenger demand, although it has increased the frequency of service on route 55 (Ipswich town centre to Bixley, via Foxhall Road) and introduced a new 10-minute service from the town centre to Chantry and Brookwood. The company also says it is working with Suffolk County Council to provide a sustainable replacement for service 87.

Of its bus services in North America, FirstGroup said FirstTransit had delivered a good first-half perfomance, with like-for-like revenues 8.4% up and its recovery plan for school bus operator First Student was expected to result in like-for-like growth of 1.2%.

However, it said like-for-like revenues at its Greyhound coach business were expected to be down 2.4% due to the prolonged economic downturn in the United States.

Group chief executive Tim O’Toole said: “I am pleased to report overall trading for the first half of the year is in line with our expectations, despite continued economic headwinds in some of our markets.

“While it is still early days, we are on track with our plans to return the group to a position of strength. The foundations have been laid for a more robust company, and we intend to continue the hard work and relentless focus that is needed to improve our operating performance, deliver enhanced growth and drive sustainable returns over the medium term.”